According to Telefonica, the annual volume of text messages sent is $8.3 trillion. And then there are companies that are increasingly turning to messaging as a key technology for engaging consumers. Banks, doctors' offices, media companies, and charities are embracing Application-to-Person SMS (A2P).A2P) as the most effective channel to interact with their audience.
And there's good reason. In a world characterized by ever-increasing digital interaction competing for ever-shorter moments of consumer attention, messaging offers two vital ingredients: convenience and practicality. Often-cited Dynmark research indicates that SMS has an open rate of 98%. SMS wins, chapter and verse.
And while there is definitely a shift towards messaging apps like Whatsapp is Facebook Messenger as a rich peer-to-peer alternative; A2P SMS messaging is growing in tandem. Analyst firm mobleSQUARED predicts the A2P market will be worth $58 billion by 2020 (up from $12.88 billion in 2015).
The interesting thing about mobileSQUARED research is that it's unusually conservative. It represents growth driven by mobile operators deploying revenue guarantee platforms to close gray routes; it doesn't represent market growth driven by companies in new verticals, growth markets in countries that haven't reached "peak mobile," or innovation in new technology areas like IoT. However, it points to the broader problem of fraud within the messaging ecosystem.
Gray routes, which fraudulently route operators' dedicated P2P [person-to-person] connections, are one aspect, but there are many other types of messaging fraud, ranging from technical exploitation of vulnerabilities in a given network to more direct manipulation of consumers.
The prevalence of spam
Perhaps more concerning is the prevalence of spam and SMiShing (SMS phishing), practices common in both mobile messaging and chat app messaging.
Earlier this year, global trade body MEF released its 2016 Mobile Messaging Fraud Report. It found that more than a quarter of consumers (28%) receive an unsolicited SMS message every day, and 58% report receiving one every week.
In messaging apps, the problem is only slightly less frequent; with 26% of chat app users receiving an unwanted text message every day, while 49% receive at least one a week.
While most unsolicited mobile messages aren't much more than a nuisance, such as notifying users of an unwanted offer or service, 33% of consumers reported receiving a SMiShing message intended to trick them into divulging personal information such as bank details or passwords for online services.
MEF estimates that SMiShing contributes an estimated $ 680 million to the $ 2 billion annual fraud cost currently borne by mobile operators and consumers. It's also interesting to note that although the SMS channel receives the highest daily occurrence of unsolicited messages, it remains the most reliable, with 35% indicating it was their most trusted channel; compared to 28% who rely most on messaging apps and only 18% choosing platforms like Facebook, Yahoo, and Skype.
This is likely due to the fact that the spam percentage is still less than 1 percent of the overall message volume. Compared to email's roughly 501 TP3T, SMS is still a clean and powerful channel.
The correlation of costs
It's also true that there's a high correlation between the cost of delivering a message and the amount of spam and fraud the channel attracts. For example, it could be argued that the reason for low spam levels in Germany and France is directly related to:
- The cost of sending a message through legitimate paths is relatively high.
- The effectiveness of local operators in those countries in blocking gray routes and filtering spam is very good.
By contrast, India, Nigeria, and South Africa have relatively low costs for sending a message; although things are improving, these networks have historically been less secure. At the same time, in many mobile-first countries, consumers are less likely to have email addresses, and SMS is therefore replacing email marketing.
A lack of cost could be the reason why 72% of the study's users received unsolicited messages from messaging apps like WhatsApp. However, there is no official API for sending business-to-consumer messages on many of these platforms. This concerns the fact that scammers are exploiting vulnerabilities in these apps' person-to-person capabilities to send messages on behalf of businesses.
Additionally, messaging apps will need to be cautious when switching to legitimate business communications if they don't want to replicate the fate of push notifications, where overzealous marketers have polluted the channel, which is now trusted only by consumers.
There are several things that can be done to reduce fraud and spam across all channels:
Create a global shortcode, long number, or email address that can be used to report unsolicited messages. The easier we make it, the more people will do it. Ensure these reports are shared across the ecosystem in an automated manner so they can be acted upon.
Operators must continue to install SMS and ss7 firewalls in their network to prevent gray and fraudulent routes from being exploited to send spam and SMiShing messages.
OTT apps need to close vulnerabilities in their systems that allow individual user accounts to send large amounts of unsolicited messages that go undetected.
When OTT apps finally allow the legitimate sending of Enterprise-to-Consumer messages via an API; they must charge for the service on a per-message basis to ensure that both scammers and overzealous merchants do not abuse the channel.
Innovate on how cloud messaging providers can better validate companies' identities to ensure SMiShing attempts are thwarted early and often.
While it is very encouraging that the A2P market is expected to grow in the coming years, we cannot take consumer confidence in the platform for granted.
Clearly the industry needs to implement measures that protect and fuel trust as drivers of future growth in new verticals and innovation in new technology areas such as IoT and machine-to-machine messaging.
